Chances are, you didn't set out to find an all-in-one software platform to help you launch your subscription business. We get it—we didn't either.
There's certainly no shortage of good software products available to start-ups these days.
But as our team spent more time as founders, operators, and advisors of early stage SaaS companies, we made two important observations:
Nearly every SaaS start-up requires the same core set of software tools.
Almost every company's software buying decisions are anything but "lean." Tools are often poorly integrated and only partially used.
We figured there had to be a better, more efficient way to launch an early stage subscription business. Here you'll find our story, why we decided to tackle this problem, and evidence that a platform solution is a better approach to building your subscription business.
Start-ups Are Buying a Slew of Point Solutions
During the course of idea validation interviews, we learned the following by interviewing founders of start-up SaaS businesses.
The average SaaS start-up we talked to was using 6-7 different software tools.
There was pain in the initial integration and ongoing maintenance of these integrations.
Founders overwhelmingly felt that their tech stacks were “duct taped together.”
Despite the use of many point solutions, most founders still struggled to get a clear view of their business’ performance. Manual reporting was the norm.
The 2020 study of SaaS trends published by Blissfully speaks to small companies now using 100+ SaaS solutions. These small businesses are most likely larger than the start-up founders or teams that we interviewed (the study defines a small business as having 1-100 employees), but this reinforces our findings. Worse yet, wasteful SaaS spending is nearly doubling year over year.
The buy-a-boat-load of software solutions trend is something that we also fell victim to. When Dimitris and I worked together at Buildium, I would often go to him with requests; "We need to buy a marketing automation platform," or "It's time to upgrade our help desk software." Sometimes Dimitris would oblige, but other times he would insist that we use very basic, homegrown tools. We were, after all, a bootstrapped start-up. In retrospect those homegrown tools served us very well—we used several of them until we reached well north of $5M in annual revenue. The point solutions that we bought more often than not came with unclear costs, significant integration and maintenance overhead, and a realization that we were actually using only about 20% of each tool's functionality.
As we reflected on this experience, we couldn't help but laugh; in an industry that celebrates Eric Ries'The Lean Start-up as gospel, why has the SaaS industry completely rejected "lean" principles when it comes to our software buying decisions?
Point Solutions Chew Up Technical Cofounders' Time
As we considered the technology decisions we made at Buildium, we realized that those decisions were probably bigger than we thought they were at the time. Dimitris spent a lot of time integrating and maintaining point solutions. He spent a lot of time building other "scaffolding" that was needed to support the business, yet wasn't core to our product. We were often ping-ponging data between tools so we could deploy marketing campaigns to the exact segment of prospects or customers that we wanted to reach. And we were often surprised when our bills came in at month end.
What is the single most precious resource to start-up founders? Ask yourself this question, or anyone else, and you'll likely get one of three responses:
The most valuable asset a startup can buy is TIME. Everything always takes two times longer than you think.
Co-founder of Mapquest, EIR at Techstars
The start-up game is by definition risky, spitting out a few big winners and many losers. In a world where 90% of start-ups will fail, anything you can do to save time, money, and development resources increases your odds of being one of those few winners. Nothing is more damaging to a start-up's chances for success than wasted founder time.
SaaS Companies Have Fueled This Fire
Ironically enough, it's marketers like me within the SaaS industry itself that have perpetrated this problem. Heck, the market even celebrates the more than 8,000 marketing technology products that are out there!
Human psychology is also to blame. We all like to buy things. We have all been seduced by tried and true marketing practices wrapped up in some new terminology. We all want to feel like we're getting software with the best feature set out there. But as you start to cobble together your start-up tech stack, stop and ask...
Does buying 5-20 point solutions really make any sense for your early stage start-up?
What percentage of each software's functionality are you actually going to use?
What context are you missing as you try to tie together a slew of disparate point solutions?
Have you ever even seen a start-up with the lifetime value of each and every customer stored on their CRM record? Seriously, have you?
Start-Ups Win With A Reduced Technology Footprint
As we considered the seductive powers of buying a slew of point solutions, we began interviewing additional SaaS founders on the topic. We came to the realization that founders really only have four basic software needs as they begin their start-up journey.
They need a CRM to store prospect and customer data
They need a billing system to charge their customers
They need to communicate with their prospects and customers
They need to report on their business performance
On top of that, as an early stage start-up their true needs in each of these areas are typically pretty basic. They need just enough functionality to operate their business as they continue to validate their business model, but what they need more of is, again, time. And if these four basic needs are met behind a single login, and a single bill, how could that not be preferable?
As we launched Outseta publicly, we began to hear from other start-up founders (see below) that the story we've told you thus far resonated.
The apps you buy should help you and teams see more clearly through clutter & ‘busy’ness, not add to it.
I’ve been thinking about building a very simple SaaS product... and was dismayed to discover that all the “overhead” was going to be far more work than the actually “product” piece. I assumed there would be some (cheap) product that would let me get up and running quickly with a simple website that let people “pick your plan,” handle the recurring billing, and let the product check to make sure the user had a plan in place before working. But... I didn’t find anything that was good enough or simple enough.
I’d love to learn about what you folks are building. I just implemented Salesforce, Hubspot, Recurly, Drift, Slack, Tettra and about 10 other tools. Definitely feel the pain.
Head of growth
Boston based tech company
The latter comment directly led us to develop Outseta's registration widget, which subscription start-ups can leverage to handle account registration, allow users to "pick their plan," and have the product check to make sure a user has a plan in place before giving them access to your product. Again, "scaffolding" that's necessary but not core product functionality.
We're on a mission to give small companies the technology tools they need, while saving critical technical founder time. All that hangs in the balance is your start-up's chances of success.
We’re building our company on Outseta. Will you join us?